BATTLE CREEK, Mich. -- Kellogg Co. is in late-stage talks with snack maker Diamond Foods about acquiring the $1 billion company, reported The New York Post.
If the talks result in a deal, Kellogg, whose cereal lineup includes Frosted Flakes, Froot Loops and Rice Krispies, would further transition toward snack foods.
A price would be more than $1.5 billion, sources told the newspaper, or $35 to $40 a share.
“Kellogg is somewhere between aggressive and desperate to use mergers to try to evolve its business away from breakfast cereal,” a source close to the situation said, adding that Kellogg has been Diamond’s most aggressive suitor.
Diamond, whose stable of brands includes Kettle potato chips, Emerald nuts and Pop Secret popcorn, put itself up for sale earlier this year and last week asked for final bids, said the report.
The Battle Creek, Mich., company may be the only suitor for all of San Francisco-based Diamond, sources said.
The company may only be willing to sell at a significant premium, sources close to the situation said.
Kellogg bought Pringles in early from Procter & Gamble after P&G terminated a previously announced deal with Diamond Foods following the revelation of accounting irregularities at Diamond that forced it to place its CEO and CFO on administrative leave.
Kellogg and Diamond declined comment, the Post said.
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